ACI Limited has reported a loss of Tk 350 million for the second quarter of FY24, more than 90 per cent of which was borne as additional finance cost for higher interest rates.
Its assets worth Tk 97.44 billion are heavily financed - nearly 58 per cent - with credits, according to the financial statement for Q2, FY24. The company had to repay more against the loans during the quarter as the central bank hiked interest rates to tame inflation.
In the second quarter of FY23, ACI spent Tk 1.24 billion as finance cost, which jumped 26 per cent in the same period of FY24.
"Cost of borrowing increased due to the increase in interest rate along with the funding of additional working capital for supporting business growth," the company said in its earnings disclosure.
ACI, which manufactures drugs, consumer goods, and animal health care products, earned Tk 365 million in Q2, FY23.
In addition to the high interest burden, the company reported higher selling and administrative expenses in the quarter through December 2023, compared to the same quarter a year earlier.
In Q2, FY23, administrative expenses were equivalent to 17.21 per cent of the sales revenue, a figure that rose to 17.71 per cent in the second year of FY24.
In FY22, ACI earned a profit Tk 893 million and paid 50 per cent cash dividends and 5 per cent stock dividends to shareholders. The following fiscal year, it endured a loss of Tk 494 million but still disbursed 40 per cent cash dividends.
After the latest earnings declaration, the share price of ACI decreased 5.92 per cent to Tk 173.20 per share on Wednesday on the Dhaka Stock Exchange.
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